Paytm shifts offline merchant business to subsidiary post-RBI’s PA license
In a significant development, Paytm parent One 97 Communications has completed the transfer of its offline merchants’ payment business to its wholly-owned subsidiary, Paytm Payments Services Limited (PPSL). This move comes after PPSL received the Reserve Bank of India’s (RBI) license to operate as a Payment Aggregator (PA). The license approval paves the way for PPSL to resume the onboarding of new merchants, a process that had been under an RBI freeze since November 2022.
The transfer of the offline merchant business to PPSL is a strategic decision aimed at ensuring compliance with the RBI’s guidelines for payment aggregators. As a licensed payment aggregator, PPSL will be responsible for managing the payment transactions of offline merchants, providing them with a secure and efficient payment processing platform. This move is expected to enhance the overall payment experience for merchants and customers alike, while also promoting the growth of digital payments in the country.
The RBI’s guidelines for payment aggregators, introduced in 2020, aim to regulate the payment aggregation landscape and ensure that payment aggregators operate in a safe and secure manner. The guidelines require payment aggregators to obtain a license from the RBI, which involves meeting certain eligibility criteria, including having a minimum net worth of Rs 15 crore. The guidelines also mandate payment aggregators to maintain a certain level of security and confidentiality in their operations, and to comply with the RBI’s instructions on know-your-customer (KYC) and anti-money laundering (AML) norms.
The license approval for PPSL is a significant milestone for Paytm, which has been working closely with the RBI to ensure compliance with the regulatory requirements. The company had suspended the onboarding of new merchants in November 2022, following the RBI’s directive to stop onboarding new online merchants. With the license approval, PPSL can now resume the onboarding of new merchants, which is expected to drive the growth of digital payments in the country.
The transfer of the offline merchant business to PPSL is also expected to have a positive impact on Paytm’s business operations. As a licensed payment aggregator, PPSL will be able to provide a more secure and efficient payment processing platform to merchants, which is expected to enhance their payment experience. The move is also expected to promote the growth of digital payments in the country, as more merchants are likely to adopt digital payment solutions.
In recent years, Paytm has been working to expand its offline merchant network, with a focus on small and medium-sized businesses. The company has been investing heavily in its offline payment business, with a focus on providing merchants with a range of payment solutions, including QR code-based payments, card payments, and UPI payments. With the license approval for PPSL, Paytm is expected to accelerate its offline expansion plans, with a focus on onboarding more merchants and providing them with a secure and efficient payment processing platform.
The RBI’s license approval for PPSL is also a testament to Paytm’s commitment to regulatory compliance and its focus on providing a secure and efficient payment processing platform to merchants. The company has been working closely with the RBI to ensure compliance with the regulatory requirements, and the license approval is a significant milestone in this journey.
In conclusion, the transfer of Paytm’s offline merchant business to PPSL is a significant development that is expected to have a positive impact on the company’s business operations. With the license approval for PPSL, Paytm can now resume the onboarding of new merchants, which is expected to drive the growth of digital payments in the country. The move is also expected to promote the growth of digital payments in the country, as more merchants are likely to adopt digital payment solutions.
About the Author
